The Colts didn't win the Super Bowl. The Federal Reserve Board did not raise rates. Hillary Clinton and John Edwards fell short in the presidential election cycle. Kohlberg Kravis Roberts & Co. did not go public, though the private-equity company considered my advice and filed the necessary paperwork.

So nobody's perfect. But even critics would have to admit that's not a bad track record. In fact, when you take the long-term view, some of my earlier predictions, such as those made in January 2007, did a little better. Wachovia Corp. and Wells Fargo Corp.
WFC, +0.02%
did merge -- a year late. Brokerage profits did tumble. It just took them an extra three or four quarters. See 2007 column.

In all honesty, predicting that stuff was easy. As the mortgage and banking bubble boomed, it didn't take a rocket scientist like Neel Kashkari to figure out that it was going to come to an end. The only question was: How low would it go?

The answer, we've come to find: Pretty low.

Take a walk down Wall Street today, and you wouldn't recognize it from a year ago. Bear Stearns is part of J.P. Morgan Chase & Co.
JPM, +1.25%
Cayne is not only gone, but the CEO of almost every Wall Street institution has been replaced in the last year and a half, save for John Mack at Morgan Stanley
MS, +2.20%
and Jamie Dimon at J.P. Morgan.

Management shuffles are the least of it.

New changes in the way banks and brokerages do business are taking shape. Ask a veteran Wall Street hand about what the industry will look like in a year, and you will get a wide range of guesses: The Fed will be policing the Street, the bonus model will disappear, hedge funds will be regulated (or will they?).

You get the idea. The only thing certain is that things will change -- or maybe not. The tumult of these times makes calling 2009 a tall task. But here are some educated guesses.

Small shops will rise

As the historic investment-banking model fades from the scene, veteran corporate advisers will form their own firms to offer advice to clients with whom they already have relationships.

This anticipated shift has some historical precedent. Today's boutique-sized advisory firms, such as Evercore Partners Inc.
EVR, +1.13%
founded by Roger Altman, along with Thomas Weisel Partners Group Inc.
TWPG
and Greenhill & Co.
GHL, +1.43%
were formed by unhappy Wall Street veterans. They wanted more autonomy, compensation, freedom and prestige than they were getting with their old firms.

Goldman goes private

The only place where we won't see this happening for a while is at Goldman Sachs Group Inc.
GS, +2.50%
The current leaders of that firm recognize that to go commercial would destroy Goldman's character and culture. Goldman executives will seriously explore taking the firm private to avoid dilution of their business model, which thrives on taking big trading risks and peddling advice to corporations around the globe.

Goldman simply may reconfigure its partnership structure. Chief Executive Lloyd Blankfein and his predecessor, outgoing Treasury Secretary Henry Paulson, have basically kept the structure in place without the ownership stakes. Goldman is still relatively cheap, with a market capitalization of $42 billion.

A caveat: If Goldman goes private, the timing will have to be right. It will have to be relatively cheap. It will have to pay back bailout cash to the government. And management will have to be confident that its business model will succeed under the new rules set by Washington. All of these probably will not happen until 2010.

Paulson Inc.

Paulson will return to public life by launching his own firm.

This move will represent a break with his predecessor Treasury secretaries with Wall Street backgrounds, such as Robert Rubin, who have typically rejoined the financial community.

But Paulson, known for his cutthroat political skills, could be seen as a threat to a sitting CEO.

J.P. Morgan will quit TARP

It's going to be a race to see which bank will be the first to throw off the shackles of the Troubled Asset Relief Program and the 5% interest payments that go with the tens of billions handed out.

Two banks, J.P. Morgan Chase and Bank of America Corp.
BAC, +1.68%
look like obvious candidates to win the race, based on their recent performance and the fact they really didn't need TARP funds in the first place.

Put your money on J.P. Morgan, if only because of one thing: The sooner it exits TARP, the sooner the House of Morgan can begin making its own compensation rules again.

And finally ...

Christopher Cox will join Citigroup Inc.
C, +1.85%
American International Group Inc.
AIG, +1.39%
will need more money from the government. Ditto Freddie Mac
FRE, +2.76%
and Fannie Mae
FNM, +7.06%
The Steelers will be crowned NFL champs. Tiger Woods will recover from surgery to win two major championships. The Dow industrials will finish above 10,000. The combined U.S. troop level in Iraq and Afghanistan will not decrease.

Further, the price of crude oil will finish the year at about $50 a barrel. Warren Buffett will show a profit in his equity stake at General Electric Co.
GE, -0.22%
The Securities and Exchange Commission and the Commodities Futures Trading Commission will merge. Legg Mason's
LM, +1.83%
Bill Miller will not beat the S&P 500 Index
SPX, +0.22%

And, come next January, someone will look back on this column and wonder how so many predictions could be so wrong.

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